African Nations Tighten Grip on Natural Resources
A guide to managing investor risk as governments in Sub-Saharan Africa increase state control over key minerals through higher taxes, local content rules, and expropriation.
This guide analyzes a growing wave of resource nationalism across Sub-Saharan Africa, where governments are asserting greater control over critical minerals vital for the global energy transition. It details specific measures recently implemented in countries like the DRC, Mali, Zambia, and Ghana, including increased royalty rates and taxes, mandatory state shareholdings, local processing requirements, export bans on raw materials, and outright license cancellations or nationalizations. Sophisticated counsel and their clients in the mining, energy, and finance sectors must understand this trend as it presents significant political and financial risks to new and existing large-scale investments, potentially disrupting project stability and supply chains. The guide advises investors to proactively mitigate these risks by negotiating stabilization clauses in host-state contracts, securing political risk insurance, and carefully structuring investments to leverage protections under bilateral investment treaties. Investors should monitor ongoing political and economic pressures, particularly in West Africa, and be prepared to use international arbitration to enforce their rights.